Exhibit 10.4
EMPLOYMENT AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AGREEMENT AND NON-COMPETITION AGREEMENT ("Agreement")
is made and entered into as of the 15th day of February, 1999, by and between
PRIMIS, INC., a Georgia corporation (the "Company"), and REVELL FRASER, an
individual ("Employee").
RECITAL:
Employee desires to be employed by the Company and the Company desires
to employ Employee on the terms and conditions hereinafter provided.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is agreed by and between the
parties hereto as follows:
1. EMPLOYMENT. The Company hereby employs Employee and Employee
accepts employment by the Company and agrees to serve the Company, upon the
terms and conditions hereinafter set forth.
2. TERM. Employee's employment shall be for a term commencing on the
date hereof and ending on February 28, 2003, unless Employee's employment
terminates prior thereto as provided in Section 7 (the "Term"). Thereafter, this
Agreement shall continue in full force and effect, except that Section 7 shall
no longer be applicable, and either party hereto may terminate Employee's
employment hereunder upon ninety (90) days prior written notice to the other;
provided, that Employee may resign at any time upon ninety (90) days prior
written notice to the Company.
3. DUTIES. Employee shall be employed by the Company as Vice
President of Sales and Marketing. So long as he is employed hereunder, Employee
agrees to devote his full business time and energy to the business and affairs
of the Company, to perform his duties hereunder to the best of his ability and
at a level of competency consistent with the position occupied, to act on all
matters in a manner he reasonably believes to be in and not opposed to the best
interests of the Company, to use his best efforts, skill and ability to promote
the profitable growth of the Company, and to perform such other duties as may be
assigned to him by the Company's Chief Executive Officer, Chairman or by the
Company's Board of Directors ("Board") from time to time.
4. COMPENSATION AND BENEFITS. For all services rendered by Employee,
the Company shall pay compensation and provide benefits to Employee as follows:
A. SALARY. The Company shall pay Employee an annual salary
("Salary") of One Hundred Sixty Thousand Dollars ($160,000), payable not less
frequently than monthly. At least once every twelve (12) months the Board shall
review Employee's Salary and make such adjustments to the Salary as it
reasonably deems appropriate, provided that the Salary shall not be reduced.
B. INCENTIVE CASH BONUS. Within seventy-five (75) days after
the end of fiscal year 1999 of the Company, the Company shall pay Employee a
cash bonus (the "Incentive Cash Bonus"), in an amount equal to twenty-five
percent (25%) of Employee's Salary, if, and only if, Employee achieves each and
every specific goal set forth on EXHIBIT A attached hereto by the date which
corresponds to each such goal set forth thereon, subject to a ten (10) day grace
period. Within seventy-five (75) days after the end of each fiscal year
thereafter, Company shall determine, and if appropriate, pay Employee an
Incentive Cash Bonus, in an amount not to exceed twenty-five (25%) of Employee's
Salary, determined by and in the reasonably exercised discretion of the Board
and based upon the Employee's achievement of specific goals concerning the
financial or other performance of the Company for such fiscal year, previously
established by the Board after consultation with the Employee.
C. RETENTION BONUS. The Company shall pay Employee a bonus for
continuing as an Employee of the Company under this Agreement, in the amount of
Twenty-five Thousand Dollars ($25,000) (the "Retention Bonus"). The Retention
Bonus shall be paid in two equal installments of Twelve Thousand Five Hundred
Dollars ($12,500) each. The first installment of the Retention Bonus shall be
paid to Employee on April ___, 1999. The second installment of the Retention
Bonus shall be paid to Employee on December 15, 1999, PROVIDED, HOWEVER, that
the Company shall have no obligation or liability to Employee to pay the second
installment of the Retention Bonus, if prior to December 15, 1999, Employee's
employment with the Company has terminated for any of the reasons set forth in
Section 7 of this Agreement.
D. BUSINESS EXPENSES. The Company shall reimburse Employee for
his reasonable direct out-of-pocket ordinary and necessary expenses, including
trade association dues, a cell phone and cell phone charges, if any, incurred by
Employee in the performance of his services hereunder and for which Employee
properly accounts in accordance with the Company's regulations and procedures in
effect from time to time.
E. VACATION. Employee shall be entitled to three (3) weeks
(fifteen business days) paid vacation during each 12-month period of the Term.
Employee shall not be entitled to carry over any unused vacation.
F. ADDITIONAL BENEFITS. Employee shall be entitled to
participate (at the reasonable expense of the Company, where allowed under
applicable law) in any and all employee retirement, medical, life and disability
insurance, and other benefits plans and perquisites as may be established and in
effect from time to time and made available to employees of the Company.
Notwithstanding the foregoing, Employee shall at all times during any term of
this Agreement be provided with family health, dental, disability, life and
accidental death and dismemberment insurance in such amounts and coverages as
set forth on EXHIBIT B attached hereto.
5. STOCK OPTIONS. As of the date hereof, Company has granted to
Employee, pursuant to the terms of the Stock Option Agreement entered into by
the Company and Employee as of the date hereof
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substantially in the form attached hereto as EXHIBIT C, an option to purchase
150,000 shares of common stock of the Company at an exercise price of $4.00 per
share, to vest as follows: 50,000 of the option shares shall vest and Employee
may exercise his option to purchase such shares on and after February 15, 2001;
50,000 of the option shares shall vest and Employee may exercise his option to
purchase such shares on and after February 15, 2002; and 50,000 of the option
shares shall vest and Employee may exercise his option to purchase such shares
on and after February 15, 2003. The Stock Option Agreement entered into by the
Company and Employee substantially in the form attached hereto as EXHIBIT C
shall terminate and supersede in their entirety any and all prior stock option
agreements or other grants of options by the Company to Employee to purchase
shares of its common stock. Without any representation or warranty by or on the
part of the Company, to the extent any of the option shares of the option
granted to Employee hereby can, by the terms set forth above, qualify as
incentive stock options under the provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the parties hereto intend that the same shall be
treated as incentive stock options, and to the extent any or all of the options
shares cannot qualify as incentive stock options under the Code, the parties
hereto intend that the same shall be treated as nonstatutory options.
6. WITHHOLDING. The Company shall be authorized to deduct and
withhold from Employee's compensation such sums as are required by law to be
deducted and withheld.
7. EVENTS CAUSING TERMINATION OF EMPLOYMENT. Employee's employment
with the Company shall terminate prior to the expiration of the Term, without
further obligation on the part of the Company, except as provided in this
Agreement, only upon the occurrence of any of the following events:
A. The voluntary resignation of Employee;
B. The death of Employee;
C. The discharge of Employee for willful misconduct, dishonesty
or fraud on Employee's part in connection with the performance of any duties
hereunder;
D. The discharge of Employee for a material breach by Employee
of any of the terms of Sections 9, 10 or 12 of this Agreement;
E. The discharge of Employee upon a determination by the
Board, acting in good faith and with reasonable justification, that Employee's
performance in his position as Vice President of Sales and Marketing of the
Company has been unsatisfactory, after first having given written notice to the
Employee that the Employee's performance has been unsatisfactory (which notice
shall set forth in reasonable detail the nature of the unsatisfactory
performance), and Employee having failed to cure such unsatisfactory performance
within thirty (30) days thereafter to the reasonable satisfaction of the
Company;
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F. The discharge of Employee upon a determination that
Employee has been unable, for any continuous period of at least three (3)
months, or for shorter periods aggregating three (3) months during any 12-month
period, to perform his duties hereunder by reason of injury, illness or other
physical or mental disability (such determination to be made by agreement
between the Company and Employee, or, in the event the Company and Employee are
unable to agree on such determination, and upon written notice thereof by either
party to the other, then each of the Company and Employee shall, within ten (10)
days after such notice is given, select a qualified and licensed physician, and
such physicians together shall select a third licensed and qualified physician
who will make such determination within thirty (30) days after his or her
appointment and whose determination shall be binding upon all parties hereto);
or
G. The discharge of Employee for conviction of Employee of a
crime involving moral turpitude.
8. PAYMENTS TO EMPLOYEE UPON TERMINATION OF EMPLOYMENT.
A. Subject to the provisions of Sections 8(B) and 8(C) below,
in the event Employee's employment with the Company shall terminate during the
Term for any of the reasons set forth in Section 7, or thereafter pursuant to
Section 2: [i] Employee's Salary shall be prorated and paid through the date of
termination; and [ii] all unvested options to purchase common stock of the
Company shall cease and terminate as of the date of termination.
B. In the event of Employee's termination pursuant to Section
7(B) or 7(F) hereof, Employee shall be entitled to receive, at such time as it
would otherwise be payable, any Incentive Cash Bonus which would have been
payable, based upon the Company's performance over the full fiscal year,
prorated for that portion of the fiscal year during which the Employee was
employed by the Company.
C. In the event of Employee's termination pursuant to Section
7(F), the Company agrees to continue to pay Employee his full Salary during such
period of disability, said payments to continue for a maximum of six (6) months.
Thereafter, Employee shall be paid such disability benefits as may be paid
pursuant to the disability insurance theretofore agreed on by Employee and the
Company pursuant to Section 4(F) of this Agreement.
D. In the event of Employee's termination of employment prior
to the expiration of the Term, for any reason other than those reasons set forth
in Section 7 of this Agreement, the Company shall [i] pay Employee in equal
monthly installments for a period of twelve (12) months from the date of
termination, an amount, in the aggregate, equal to Employee's Salary, [ii] pay
Employee at such time as it otherwise would have been payable, the Incentive
Cash Bonus, if any, which would have been payable, based upon the Company's
performance over the full fiscal year, prorated for that portion of the fiscal
year during which Employee was employed by the Company, and [iii] upon receipt
of written notice from Employee within twenty (20) days of such termination of
employment, purchase at a closing within ninety (90) days from the date of
termination, (a) all of Employee's vested but unexercised options to purchase
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stock of the Company for an amount equal to the fair market value of the shares
subject to the options less the exercise price therefor, and (b) the shares of
stock of the Company purchased by Employee pursuant his exercise of said options
for an amount equal to the fair market value thereof, as the case may be (in the
case of both (a) and (b), fair market value shall be determined by agreement
between the Company and Employee, or, if the Company and Employee are unable to
agree on the fair market value within thirty (30) days after termination, then
each of the Company and Employee shall promptly select an appraiser, and such
appraisers shall together promptly select a third appraiser, and the third
appraiser will, within thirty (30) days of his appointment, determine the fair
market value of the shares, and Employee and the Company shall each bear fifty
percent (50%) of the cost and expense of this appraisal process, including the
fees of any appraisers appointed in accordance herewith), and if in the case of
(a) the fair market value does not exceed the exercise price of such options,
then such options shall be repurchased by the Company for one hundred dollars
($100) in the aggregate.
9. COVENANTS NOT TO SOLICIT OR COMPETE.
A. NON-COMPETITION. Employee recognizes one of the inducements
for the Company to enter into this agreement of employment is the understanding
that there will be no competition or interference, directly or indirectly, for a
period of time after the termination of his employment with the Company.
Employee further recognizes and acknowledges that, in consideration of the scope
of the business of the Company and the nature of the services Employee provides
to the Company as its Vice President of Sales and Marketing, and in order to
protect the Company's legitimate interests, Employee's covenant not to compete
must include each of the areas where the Company currently does business, which
areas include Alabama, Arizona, California, Florida, Georgia, Maryland, North
Carolina, Ohio and Virginia (collectively, the "Territory"), to the extent
Employee hereafter actively performs, supervises or assists in the Company's
business in such areas or has material contact with customers of the Company
within such areas. In consideration of the covenants herein, Employee agrees
that for the period he is employed by the Company (whether during the Term or
after the Term ends) and for a one-year period immediately following the
termination of his employment with the Company for any reason whatsoever, he
shall not, within the Territory, in any manner, directly or indirectly or by
assisting others, engage in any business which is the same or essentially the
same as the business of the Company, such business being the business of real
estate information services, including commercial and residential real estate
appraisals, title exams, flood certifications and credit reports, as a salesman,
sales manager, customer relations person or marketer or as a supervisor,
administrator, executive, senior or management level employee, owner,
proprietor, shareholder or consultant; provided that Employee shall not be
restricted from owning less than 5% of the outstanding shares of a company whose
shares are publicly traded.
B. NON-SOLICITATION. Employee agrees that for the period he is
employed by the Company (whether during the Term or after the Term ends) and for
a one-year period immediately following the termination of his employment with
the Company for any reason whatsoever, he shall not (other than in the regular
course of the Company's business), within the Territory, solicit, directly or
indirectly, business of the type then being performed therein by the Company
from any person, partnership,
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corporation or other entity which [a] is a customer of the Company within the
Territory at the time Employee's employment with the Company terminates,
including an actively-sought prospective customer, or [b] was such a customer
within the two-year period immediately prior thereto, for the purposes of
providing products or services that are competitive with those provided by the
Company, provided that in the case of either [a] or [b], Employee had material
contact with such customer during and as a part or result of his employment with
the Company.
10. NON-INDUCEMENT AND NON-DISCLOSURE.
A. NON-INDUCEMENT. Employee agrees that for the period he is
employed by the Company (whether during the Term or after the Term ends) and for
a two-year period immediately following the termination of his employment with
the Company for any reason whatsoever, he shall not directly or indirectly,
individually or on behalf of persons not parties to this Agreement, aid or
endeavor to solicit or induce any of the Company's employees to leave their
employment with the Company in order to accept employment with Employee or
another person, partnership, corporation or other entity.
B. NON-DISCLOSURE. At no time shall Employee divulge, furnish
or make accessible to anyone (other than in the regular course of the Company's
business) any knowledge or information with respect to confidential information
or data of the Company, or with respect to any confidential information or data
of any of the customers of the Company, or with respect to any other
confidential aspect of the business or products or services of the Company or
its customers.
11. INJUNCTIVE RELIEF FOR BREACH: ENFORCEABILITY. Employee agrees that
Company may not be adequately compensated by damages for a breach by Employee of
any of the covenants contained in Sections 9 and 10, and that, in addition to
all other remedies, the Company shall be entitled to injunctive relief and
specific performance. In such event, the periods of time referred to in Sections
9 and 10 shall be deemed extended for a period equal to the respective period
during which Employee is in breach thereof, in order to provide for injunctive
relief and specific performance for a period equal to the full term thereof. The
covenants contained in Sections 9 and 10 shall be construed as separate
covenants, and if any court shall finally determine that the restraints provided
for in any such covenants are too broad as to the geographic area, activity or
time covered, said area, activity or time covered may be reduced to whatever
extent the court deems reasonable and such covenants shall be enforced as to
such reduced area, activity or time and Employee expressly agrees that this
Agreement, as so amended, shall be valid and binding.
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12. PROPRIETARY RIGHTS.
A. RECOGNITION OF COMPANY'S RIGHTS; NONDISCLOSURE. At all
times during the term of his employment and thereafter, Employee will hold in
strictest confidence and will not disclose, use, lecture upon or publish any of
the Company's Proprietary Information (defined below), except as such
disclosure, use or publication may be required in connection with his work for
the Company, or unless the Chief Executive Officer or the Board of Directors of
the Company expressly authorizes such in writing. Employee shall and hereby does
assign to the Company any rights he may have or acquire in such Proprietary
Information and recognizes that all Proprietary Information shall be the sole
property of the Company and its assigns and that the Company and its assigns
shall be the sole owner of all patent rights, copyrights, trade secret rights
and all other rights throughout the world (collectively, "Proprietary Rights")
in connection therewith. The term "Proprietary Information" shall mean trade
secrets, confidential knowledge, data or any other proprietary information of
the Company which the Company treats as confidential with respect to the general
public. By way of illustration but not limitation, "Proprietary Information"
includes (a) inventions, trade secrets, ideas, processes, formulas, data,
programs, other words of authorship, know-how, improvements, discoveries,
developments, designs and techniques relating to the business or proposed
products of the Company and which were learned or discovered by Employee during
the term of his employment with the Company (hereinafter collectively referred
to as "Inventions"); and (b) information regarding plans for research,
development, new products and services, marketing and selling, business plans,
budgets and unpublished financial statements, licenses, prices and costs,
suppliers and customers which were learned or discovered by him during the term
of his employment with the Company, and information regarding the skills and
compensation of other employees of the Company. For purposes of this Agreement,
the term "Proprietary Information" shall not include information that Employee
can show by competent proof (i) was known to Employee prior to disclosure by the
Company; (ii) was generally known to the public at the time Company disclosed
the information to Employee; (iii) became generally known to the public after
disclosure by the Company through no act or omission of Employee; or (iv) was
disclosed to Employee by a third party having a bona fide right both to possess
the information and to disclose it to Employee.
B. THIRD PARTY INFORMATION. Employee understands, in addition,
that the Company may from time to time receive from third parties confidential
or proprietary information ("Third Party Information") subject to a duty of the
Company's part to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the term of his employment and
thereafter, Employee will hold Third Party Information in the strictest
confidence and will not disclose (to anyone other than Company personnel who
need to know such information in connection with their work for the Company) or
use, except in connection with his work for the Company, Third Party Information
unless expressly authorized by the Chairman or Chief Executive Officer of the
Company in writing.
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C. ASSIGNMENT OF INVENTIONS.
[1] Employee shall and hereby does assign to the Company all
his right, title and interest in and to any and all Inventions (and all
Proprietary Rights with respect thereto) whether or not patentable or
registrable under copyright or similar statutes that were made or conceived or
reduced to practice or learned by him, either alone or jointly with others,
during the period of his employment with the Company.
[2] Employee shall and hereby does acknowledge that
all original works of authorship which are made by him (solely or jointly with
others) during the term of him employment with the Company and that are within
the scope of his employment and which are protectable by copyright are "works
made for hire," as that term is defined in the United States Copyright Act (17
U.S.C., Section 1201). Inventions assigned to or as directed by the Company by
this Section 12.C are hereinafter referred to as 'Company Inventions."
D. ENFORCEMENT OF PROPRIETARY RIGHTS. Employee will assist the
Company in every proper way to obtain and from time to time enforce United
States and foreign Proprietary Rights relating to Company Inventions in any and
all countries. To that end he will execute, verify and deliver such documents
and perform such other acts (including appearances as a witness) as the Company
may reasonably request for use in applying for, obtaining, perfecting,
evidencing, sustaining and enforcing such Proprietary Rights and the assignment
thereof. In addition, Employee will execute, verify and deliver assignments of
such Proprietary Rights to the Company or its designee. Employee's obligation to
assist the Company with respect to Proprietary Rights relating to such Company
Inventions in any and all countries shall continue beyond the termination of his
employment, but the Company shall compensate him at a reasonable rate after
Employee's termination for the time actually spent by him at the Company's
request on such assistance. In the event the Company is unable for any reason,
after reasonable effort, to secure Employee's signature on any document needed
in connection with the actions specified in the preceding, Employee hereby
irrevocably designates and appoints the Company and its duly authorized officers
and agents as his agent and attorney in fact, to act for and in his behalf to
execute, verify and file any such documents and to do all other lawfully
permitted acts to further the purposes of the preceding paragraph thereon with
the same legal force and effect as if executed by Employee. Employee hereby
waives and quitclaims to the Company any and all claims, of any nature
whatsoever, which he now or may hereafter have for infringement of any
Proprietary Rights assigned hereunder to the Company.
E. PRIOR INVENTIONS. Inventions, if any, patented or unpatented,
which Employee made prior to the commencement of his employment with the Company
are excluded from the scope of this Agreement.
F. RETURN OF COMPANY DOCUMENTS. When Employee leaves the
employ of the Company, he will deliver to the Company all drawings, notes,
memoranda, specifications, devices, formulas, and documents, together with all
copies thereof, and any other material containing or disclosing
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any Company Invention, Third Party Information or Proprietary Information of the
Company. Employee further agrees that any property situated on the Company's
premises and owned by the Company, including disks and other storage media,
filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice.
G. LEGAL AND EQUITABLE REMEDIES. Because Employee's services
are personal and unique and because Employee may have access to and become
acquainted with the Proprietary Information of the Company, the Company shall
have the right to enforce this Section 12 of the Agreement and any of its
provisions by injunctions, specific performance or other equitable relief,
without bond, without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
13. NOTICES. All notices and other communications hereunder shall be
in writing and shall be given or made by hand delivery, or by certified or
registered mail, return receipt requested, postage prepaid, or by telegram, as
follows, or to such other person or address as shall be hereafter designated by
notice given in accordance with this Section:
A. If to the Company: Primis, Inc.
Attn: Chief Executive Officer
Xxxxx 0000
00 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
With a copy to: Xxxxx, Xxxxxxx & Xxxxx
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
B. If to Employee: Revell Fraser
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With a copy to:
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Any notice or other communication hereunder shall be deemed to have been duly
given or made if made by hand, when delivered against receipt therefor or when
attempted delivery shall be rejected, as the case may be, if made by letter,
upon deposit thereof in the mail, postage prepaid, registered or certified, with
return receipt requested, and if made by telegram, facsimile or reputable
overnight courier when sent. Notwithstanding the foregoing, any notice or other
communication hereunder which is actually received by a party hereto shall be
deemed to have been duly given or made to such party.
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14. MISCELLANEOUS.
A. ASSIGNMENT. This is a contract for personal services by
Employee and may not be assigned by Employee. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.
B. WAIVER OF BREACH. Failure or delay by either party to
insist upon compliance with any provision hereof shall not operate as, and is
not to be construed as, a waiver or amendment of such provision. The waiver by
either party of a breach of any provision of this Agreement by the other shall
not operate or be construed as a waiver of any subsequent breach, whether
occurring under similar or dissimilar circumstances.
C. ENTIRE AGREEMENT: CANCELLATION OF PRIOR AGREEMENTS. This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof. It may not be changed orally, but only by an amendment in
writing signed by the parties hereto. All prior agreements or understandings
concerning Employee's employment by the Company are hereby canceled and
superseded by this Agreement.
D. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
the remainder of this Agreement.
E. HEADINGS. The headings contained in this Agreement are for
convenience only and shall not be deemed a part of this Agreement in construing
or interpreting the provisions hereof.
F. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Georgia. In
connection with the enforcement of this Agreement, the parties consent to
jurisdiction in the courts of Georgia. The prevailing party in any action to
enforce this Agreement shall be entitled to attorneys' fees from the
non-prevailing party.
G. REMEDIES. In accordance with O.C.G.A. Section 9-9-2(c)(9), as
evidenced by the parties affixing their initials hereon next to this Section
14.G., any controversy arising out of, or relating to, this Agreement or any
modification or extension of this Agreement, including any claim for damages,
recission, specific performance or other legal or equitable relief, shall be
settled by arbitration in the City of Atlanta, State of Georgia, in accordance
with the rules then obtaining of the American Arbitration Association. The
determination of the arbitrator when made shall be binding upon all parties
bound by the terms of this Agreement. Judgment upon the award rendered by the
arbitrator may be entered in any court of competent jurisdiction. The foregoing
notwithstanding, the Company shall have the right to seek injunctive relief from
any court of competent jurisdiction in the event of any breach or threatened
breach of Sections 9, 10 or 12 of this Agreement. Initials:
Company: ______________________; Employee: _____________________.
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H. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day, month and year first above written.
PRIMIS, INC.
By:
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Title:
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("Company")
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REVELL FRASER
("Employee")
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EXHIBIT A
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EXHIBIT B
Insurance
Company will use commercially reasonable efforts to establish a life insurance
and accidental death and disability insurance program for its employees in which
Employee can participate provided that such program shall be in place no later
than June 1, 1999.
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EXHIBIT C
Stock Option Agreement
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